Internal Revenue Service - U.S. Department of the Treasury

[Pages:14]Appropriated Accounts Internal Revenue Service

Internal Revenue Service

Program Summary by Appropriations Account

(Dollars in thousands)

FY 2006

FY 2007

FY 2008

Appropriation

Enacted

President's Budget

CR-rate

President's $ Change % Change Budget over CR-rate over CR-rate

Taxpayer Services

$2,142,042 $2,079,151 $2,046,908 $2,103,089

$56,181

2.74%

Pre-filing Taxpayer Assistance and Education

577,425

575,694

556,693

578,078

21,385

3.84%

Filing and Account Services

1,564,617

1,503,457

1,490,215

1,525,011

34,796

2.33%

Enforcement

4,708,441

4,797,126

4,660,572

4,925,498

264,926

5.68%

Investigations

579,555

591,090

579,883

602,872

22,989

3.96%

Exam and Collections

3,919,275

4,054,760

3,932,599

4,165,233

232,634

5.92%

Regulatory

209,611

151,276

148,090

157,393

9,303

6.28%

Operations Support

3,461,205

3,488,404

3,519,228

3,769,587

250,359

7.11%

Infrastructure

864,403

873,146

873,146

908,095

34,949

4.00%

Shared Services and Support

1,176,202

1,129,617

1,163,846

1,223,351

59,505

5.11%

Information Services

1,420,600

1,485,641

1,482,236

1,638,141

155,905

10.52%

Business Systems Modernization

242,010

212,310

196,810

282,090

85,280

43.33%

Health Insurance Tax Credit Administration

20,008

14,846

14,846

15,235

389

2.62%

Subtotal, Internal Revenue Service

$10,573,706 $10,591,837 $10,438,364 $11,095,499

$657,135

6.30%

Offsetting Collections - Reimbursable

137,110

125,723

125,723

133,498

7,775

6.18%

Mandatory Appropriation - User Fees

100,000

242,000

242,000

180,000

(62,000)

-25.62%

Total Program Operating Level

$10,810,816 $10,959,560 $10,806,087 $11,408,997

$602,910

5.58%

FY 2006 Enacted is presented in the new budget structure for comparability across fiscal years. This differs from the FY 2008 President's Budget Appendix

which presents FY 2006 as it was executed. The FY 2006 enacted level excludes rescission of unobligated balances ($29 million from Taxpayer Services

and $9 million from HITCA). In addition, FY 2007 CR-rate includes proposed interappropriation transfers.

Explanation of Request

The FY 2008 President's Budget for the Internal Revenue Service (IRS) includes funding to implement Treasury's tax strategy (see press/releases/ hp111.htm) to increase tax compliance while minimizing additional taxpayer burden. Also, the IRS will continue its efforts to increase and improve the delivery of services offered to taxpayers by expanding its research and implementing new technology (e.g., Spanish "Where's My Refund?" and an estimated calling wait time feature). The IRS will invest in information technology to give its employees the tools they need to administer and improve both taxpayer service and enforcement programs.

Total resources to support the IRS' activities for FY 2008 are $11,408,997,000. This includes $11,095,499,000 from direct appropriation, $133,498,000 from reimbursable programs, and $180,000,000 from user fees. The direct appropriation is a $657,135,000 increase, or 6.3 percent, over the FY 2007 Continuing Resolution (CR) rate of $10,438,364,000.

The IRS administers America's tax laws and collects the revenue that funds most government operations and public services. The IRS' taxpayer service programs provide assistance to millions of taxpayers to help them understand and meet their tax obligations. The

IRS' enforcement programs are aimed at deterring taxpayers inclined to evade their responsibilities while vigorously pursuing those who violate tax laws. Delivering these programs demand a secure and modernized infrastructure capable to fairly, effectively, and efficiently collect taxes while minimizing taxpayer burden. The IRS FY 2008 President's Budget request supports its five-year strategic plan and Treasury's compliance improvement strategy. These documents underscore the Treasury Department commitment to provide quality service to taxpayers while enforcing America's tax laws in a balanced manner. The IRS' strategic plan goals are:

? Improve Taxpayer Service. Help people understand their tax obligations, making it easier for them to participate in the tax system;

? Enhance Enforcement of the Tax Law. Ensure taxpayers meet their tax obligations, so that when Americans pay their taxes, they can be confident their neighbors and competitors are also doing the same; and

? Modernize the IRS through its People, Processes and Technology. Strategically manage resources, associated business processes and technology systems to effectively and efficiently meet service and enforcement strategic goals.

Department of the Treasury ? Budget in Brief FY 2008

55

In FY 2007, Congress implemented a new appropriations structure for the IRS which realigned resources from its three major operating appropriations into three new accounts ? Taxpayer Service (TS), Enforcement (ENF), and Operations Support (OS). In addition, funding for the IRS' staffing associated with direct management of its Business Systems Modernization (BSM) program was realigned from the previous Information Systems appropriation to the BSM appropriation to reflect full program funding.

The FY 2008 President's Budget request for the IRS increases funding as part of a strategy to improve compliance by:

? Implementing legislative and regulatory changes;

? Increasing front-line enforcement resources;

Tax Enforcement Program: The IRS continues its emphasis on tax enforcement, increasing collections of delinquent tax debt from $34 billion in 2002 to $49 billion in 2006, an increase of 44 percent. Since 2003, federal government receipts have also increased by over $600 billion, with revenue growth the greatest in the areas of corporate taxes and high-income individual taxes. In FY 2008, the President's Budget increases funding for enforcement by $440,264,000, which includes $291,332,000 for new enforcement initiatives and $148,932,000 in cost increases. As in 2006 and 2007, the Administration proposes to include enforcement increases as a Budget Enforcement Act program integrity cap adjustment (see chapter 15, Budget Reform Proposals in the Analytical Perspectives volume of the 2008 Budget). The IRS' enforcement resources are funded in the Enforcement and Operations Support appropriations.

? Increasing voluntary compliance through improved taxpayer service options and enhanced research; and

? Investing in technology to reverse infrastructure deterioration, accelerate modernization, and improve the productivity of existing resources.

IRS Funding History

[Dollars in Thousands]

$0

$2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,0000,000 $12,000,000

FY 2008

FY 2007*

FY 2006

Taxpayer Services Enforcement Operations Support Business Systems Modernization Health Insurance Tax Credit Administration

* President's Budget

Increased resources for the IRS' exam and collection programs yield direct measurable results. Once the new staff proposed in this request are trained and gain more experience, the enforcement revenue generated each year will be $699 million. However, this estimate excludes the likely larger revenue impact from the deterrence value of these and other IRS enforcement programs (e.g., criminal investigations). It also excludes the impact of taxpayer services on voluntary compliance.

The IRS cannot currently measure either the impact of deterrence or service, but they are positive. The complexity of the nation's current tax system is a significant reason for the tax gap, and even sophisticated taxpayers make honest mistakes on their tax returns. Accordingly, helping taxpayers understand their obligations under the tax law is a critical part of improving voluntary compliance. To this end, the IRS remains committed to a balanced program assisting taxpayers in both understanding the tax law and remitting the proper amount of tax.

56

Department of the Treasury ? Budget in Brief FY 2008

Appropriated Accounts Internal Revenue Service

Taxpayer Service and Enforcement Programs

(Dollars in thousands)

FY 2006

Programs

Enacted

Taxpayer Service Direct Appropriation Operations Support

Enforcement Direct Appropriation Operations Support

Total

$3,498,473 $2,142,042 $1,356,431 $6,813,215 $4,708,441 $2,104,774 $10,311,688

FY 2007

CR-rate

$3,438,758 $2,046,908 $1,391,850 $6,787,950 $4,660,572 $2,127,378 $10,226,708

FY 2008

President's Budget

% Change over CR-rate

$3,569,960

3.8%

$2,103,089

$1,466,871

$7,228,214

6.5%

$4,925,498

$2,302,716

$10,798,174

5.6%

Taxpayer Service Program: Helping the public understand its tax reporting and payment obligations is a cornerstone of taxpayer compliance. In FY 2008, the President's Budget increases funding for taxpayer service by $131,202,000. This includes $56,055,000 for new service initiatives and $75,147,000 in cost increases. The IRS' taxpayer service resources are funded in the Taxpayer Service and Operations Support appropriations.

Purpose of Program

The IRS and its employees represent the face of the Federal Government to more American citizens than any other government agency. The IRS collects 95 percent of the revenues that fund the Federal Government. The IRS FY 2008 President's Budget request will help strengthen the government's ability to collect more of taxes that are legally owed.

The great majority of Americans pay the tax they owe on time, but there is still significant non-compliance due to non-filing, underreporting, and non-payment. The IRS' latest estimate shows that the net tax gap for Tax Year 2001 was approximately $290 billion.

The FY 2008 President's Budget request supports improving compliance by funding activities that promote better tax administration and compliance with the tax laws and focus on the following program priorities and objectives:

? Modernize information systems and business processes to maximize resources and improve service and enforcement;

? Enhance research to better allocate resources to IRS programs;

? Discourage and deter non-compliance with emphasis on corrosive activity by corporations, high-income taxpayers and abusive domestic and off-shore tax entities;

? Deter abuse within the tax-exempt community; and

? Simplify the tax process and improve service options for the taxpaying public.

Department of the Treasury ? Budget in Brief FY 2008

57

IRS FY 2008 Budget Highlights

(Dollars in thousands)

Appropriation

FY 2006 Enacted FY 2007 President's Budget

CR-rate Adjustment FY 2007 CR-Rate

Interappropriation Transfer Corrections to Budget Restructure FY 2007 Operating Plan at CR-rate

Changes to Base Technical Adjustments to FY 2007 Base due to CR Base Adjustment Maintaining Current Levels (MCLs) Pay Annualization Pay Inflation Adjustment Non-Pay Inflation Adjustment Efficiency Savings

Subtotal FY 2008 Changes to Base FY 2008 Base

Program Changes Program Decreases/Savings: Increased e-File Savings Program Reinvestments: Increase Efficiency through Submission Processing Site Consolidations Program Increases: Infrastructure Initiatives Upgrade Critical IT Infrastructure Enhance Computer Security Incident Response Center (CSIRC) and Network Infrastructure Security Fund Business Systems Modernization Enforcement Initiatives Improve Compliance Estimates, Measures, and Detection of Non-Compliance Improve Compliance Among Small Business and Self-Employed Taxpayers Implement Tax Gap Legislative Proposals to Improve Compliance Increase Compliance for Large Multinational Businesses Expand Document Matching in Existing Sites Establish New Document Matching - Kansas City Increase Individual Filing Compliance Increase Tax-Exempt Entity Compliance Increase Criminal Tax Investigations Taxpayer Service Initiatives Research Effect of Service on Taxpayer Compliance Expand Volunteer Income Tax Assistance Implement Taxpayer Assistance Blueprint

Subtotal FY 2008 Program Changes Total FY 2008 President's Budget Request

Taxpayer Services

$2,142,042 $2,079,151

(20,000) $2,059,151

(12,243) $2,046,908

$0 0 $71,500 10,190 58,424 2,886 (23,407) $48,093 $2,095,001 $8,088 ($5,968) (5,968) $5,968 5,968 $8,088 $0

$4,235

2,437

1,055

248 495

$3,853

3,853

$8,088 $2,103,089

Enforcement

Operations Support

Business Systems Moderniza-

tion

Health Insurance Tax Credit Administra-

tion

$4,708,441 $3,461,205 $242,010 $20,008

Total $10,573,706

$4,797,126 $3,488,404 $212,310 $14,846 $10,591,837

(88,721) (29,252) (15,500)

(153,473)

$4,708,405 $3,459,152 $196,810 $14,846 $10,438,364

(47,833)

60,076

0

$4,660,572 $3,519,228 $196,810 $14,846 $10,438,364

$0 0 $162,373 23,083 131,573 7,717 (60,166) $102,207 $4,762,779 $162,719 $0

$0

$5,687 5,687 $104,500 6,970 41,532 55,998 (36,408) $73,779 $3,593,007 $176,580 ($511) (511) $511

511

$162,719 $0

$176,580 $81,000 60,000 21,000

$162,719 29,054

$79,433 11,968

55,480

15,248

23,045

19,916

5,229

18,536 15,669 3,806 11,794 8,464

$0

$162,719 $4,925,498

9,422 7,536 2,243 3,206 1,536 $16,147 5,000 1,147 10,000 $176,580 $3,769,587

$21,886 21,886 $1,245

226 1,019

$23,131 $219,941 $62,149

$0 $0 $62,149 $62,149

62,149 $0

$0

$62,149 $282,090

$0 $27,573

0

27,573

$389 $340,007

15

40,484

82 232,630

292

66,893

(119,981)

$389 $247,599

$15,235 $10,685,963

$0 $409,536

$0 ($6,479)

(6,479)

$0

$6,479

6,479

$0 $409,536 $0 $143,149

60,000 21,000

62,149 $0 $246,387

41,022

73,165

23,045

26,200

27,958 23,453 6,544 15,000 10,000 $0 $20,000 5,000 5,000 10,000 $0 $409,536 $15,235 $11,095,499

58

Department of the Treasury ? Budget in Brief FY 2008

FY 2008 Budget Adjustments

The IRS' total funding increase for FY 2008 is $657,135,000, which includes $27,573,000 for a technical adjustment to the FY 2007 base; $340,007,000 for maintaining current levels; $119,981,000 from efficiency savings; and a net program increase of $409,536,000 to enhance the IRS' infrastructure, modernization, enforcement, and taxpayer service programs that focus on improving compliance, and implement tax compliance improvement legislation. By 2010, these investments are projected to increase annual enforcement revenue by $699 million dollars a year. In addition, the tax compliance improvement legislative proposals will generate $29 billion over the next ten years.

The IRS' program initiatives focus on the most significant needs for FY 2008:

? $143,149,000 to improve the IRS' information technology (IT) infrastructure, including $62,149,000 for the BSM program and $81,000,000 for security and infrastructure enhancements;

? $246,387,000 to expand enforcement activities targeted at improving compliance; and

? $20,000,000 to enhance taxpayer service through expanded volunteer tax assistance, increased funding for research to determine the most effective means to help taxpayers, and implementing new technology to improve taxpayer service.

FY 2007 Continuing Resolution (CR) Rate The FY 2007 CR-rate for the IRS is $10,438,364,000, supporting an estimated 91,718 FTE. This amount reflects a reduction of $153,473,000 and 1,318 FTE from the FY 2007 President's Budget request.

Adjustments Technical Adjustments to the FY 2007 Base Attributed to the CR +$27,573,000/0 FTE This adjustment restores $21,886,000 for BSM projects and management costs and $5,687,000 for critical IT and other supporting infrastructure.

Maintaining Current Levels +$340,007,000/0 FTE Funds are requested for annualizing the cost of the January 2007 pay increase ($40,484,000), the proposed January 2008 pay raise ($232,630,000), and non-pay inflation for items such as contracts,

travel, supplies, equipment, and rent adjustments ($66,893,000).

Efficiency Savings ?$119,981,000/?1,184 FTE The IRS continues to improve the efficiency of its taxpayer service and enforcement programs. Enhancement of technology; improved workload selection models; on-going productivity and efficiency improvements; and streamlining, centralizing, and consolidating of work processes and programs will lead to operational efficiencies resulting in significant savings in FY 2008.

Program Decreases/Savings Increased e-File Savings ?$6,479,000/0 FTE This program decrease is a result of savings from increased electronic filing (e-File) and a projected decrease of 4.2 million paper returns filed (3.7 million individual and 0.5 million business) in FY 2008. This budget request proposes to reinvest these savings toward related cost associated with the ramp down of the Philadelphia Processing Center.

Program Reinvestments Increase Efficiency through Submission Processing Site Consolidations +6,479,000/ 0 FTE Increased eFile savings will be reinvested to fund $5,968,000 in severance pay and $511,000 for support costs associated with the ramp down of the Philadelphia Processing Center. However, the IRS will maintain a large staff of service and enforcement personnel in Philadelphia. Increased use of e-File continues to have a significant impact on Submission Processing Centers as individual paper return volumes decline. As a result, the IRS is consolidating the processing of individual paper returns at fewer submission processing sites.

Program Increases Upgrade Critical IT Infrastructure +$60,000,000/0 FTE This infrastructure initiative will provide funding to upgrade the backlog of the IRS' equipment that has exceeded its life cycle. Failure to replace the IRS' IT infrastructure will lead to increased maintenance costs and increase the risk of disrupting business operations. Planned expenditures in FY 2008 include procuring and replacing desktop computers; automated call distributor hardware; mission critical servers; and Wide Area Network/Local Area Network routers and switches.

Department of the Treasury ? Budget in Brief FY 2008

Appropriated Accounts Internal Revenue Service

59

60

Enhance Computer Security Incident Response Center (CSIRC) and Network Infrastructure Security +$21,000,000/0 FTE This infrastructure initiative will provide $13,100,000 to fund enhancements to the CSIRC necessary to keep pace with the ever-changing security threat environment through enhanced detection and analysis capability, improved forensics, and the capacity to identify and respond to potential intrusions before they occur. The remaining $7,900,000 will fund enhancements to the IRS' network infrastructure security, providing the capability to perform continuous monitoring of the security of operational systems, using security tools, tactics, techniques and procedures to perform network security compliance monitoring of all IT assets on the network.

Fund Business Systems Modernization +$62,149,000/0 FTE This initiative will provide funding to continue the development and deployment of the IRS' modernization program in line with the recommendations identified in the IRS' Modernization, Vision, and Strategy. This increase will allow the IRS to continue progress on modernized projects, such as the Customer Account Data Engine (CADE), Account Management Services (AMS), Modernized e-File (MeF), and Common Services Projects (CSP).

CADE is the IRS' lynchpin modernization project that will replace the antiquated master file system, which is based on 1960s architecture. The IRS is developing CADE in stages and expects to retire the Individual Master File in 2012. When fully operational, the CADE database will house tax information for more than 200 million individual and business taxpayers.

AMS will provide a Common User Interface for access and update of taxpayer accounts managed by CADE and Individual Master File, Corporate Files on Line, and the Integrated Data Retrieval System. AMS will provide immediate access to integrated account data, which improves the ability to resolve account inquiries with minimal taxpayer interaction and facilitates the taxpayer's ability to self assist or self correct.

MeF is the future of electronic filing. It provides a single Extensible Markup Language-based standard

for filing electronic tax returns. Standardizing the formats/ structures for all filings will allow transmitters to submit multiple return types in the same transmission, something that restrains e-file growth currently. In FY 2008, the IRS will start development and implementation of the 1040 on the MeF platform, which is expected to take two years.

CSP will provide funding for new portals, which are technology platforms that meet many IRS business needs through web-based front-ends and provide secure access to data, applications, and services. The portals are mission-critical components of the enterprise infrastructure required to support key business processes and compliance initiatives.

The benefits accruing from the delivery and implementation of BSM projects not only provide value to taxpayers, the business community, and government, but also contribute to operational improvements and efficiencies within the IRS.

Improve Compliance Estimates, Measures, and Detection of Non-Compliance +$41,022,000/ +258 FTE This enforcement initiative will fund research studies of compliance data for new segments of taxpayers needed to update existing estimates of reporting compliance. Unlike the past, the IRS will conduct an annual study of compliance among 1040 filers based on a smaller sample size than the 2001 National Research Program study. This will provide some fresh compliance data each year, and by combining samples over several years will provide a regular update to the larger sample size needed to keep the IRS' targeting systems and compliance estimates up to date. The data captured during the studies will enable the IRS to develop strategies to combat specific areas of non-compliance, improve voluntary compliance, and allocate resources more effectively. This initiative benefits taxpayers by significantly improving workload selection formulas that reduce the burden of unnecessary taxpayer contacts. This initiative will produce almost $9 million in additional annual enforcement revenue, once the new hires reach full potential in FY 2010.

Improve Compliance Among Small Business and SelfEmployed Taxpayers +$73,165,000/ +485 FTE This enforcement initiative will address and improve compliance among small business and self-employed

Department of the Treasury ? Budget in Brief FY 2008

taxpayers in the elements of reporting, filing, and payment compliance by increasing audits of highrisk tax returns, collecting unpaid taxes from filed and unfiled tax returns, and investigating and, where appropriate, prosecuting persons who have evaded taxes. This request will produce $144 million in additional annual enforcement revenue, once new hires reach full potential in FY 2010,

Implement Legislative Proposals to Improve Compliance +$23,045,000/0 FTE While the IRS continues to address compliance problems by improving customer service and using traditional methods of enforcement, the FY 2008 President's Budget includes several legislative proposals that would provide the IRS with additional enforcement tools to improve compliance. It is estimated that these proposals could generate approximately $29 billion in revenue over the next ten years. These proposals would expand information reporting, improve compliance by businesses, strengthen tax administration, and expand penalties (see Receipts in the Analytical Perspectives volume of the 2008 President's Budget). This enforcement initiative includes funding for purchasing software and making modifications to the IRS' IT systems necessary to implement these legislative proposals.

Increase Compliance for Large Multinational Businesses +$26,200,000/+158 FTE This enforcement initiative will increase examination coverage for large, complex business returns; foreign residents; and smaller corporations with significant international activity. The initiative addresses risks arising from the rapid increase in globalization, and the related increase in foreign business activity and multi-national transactions where the potential for non-compliance is significant in the reporting of transactions that occur across differing tax jurisdictions. With this funding, coverage for large corporate and flow-through returns will increase from 7.9 to 8.2 percent in FY 2008, and produce over $74 million in additional annual enforcement revenue, once the new hires reach full potential in FY 2010.

Expand Document Matching in Existing Sites +$27,958,000/+214 FTE This enforcement initiative will increase coverage within the Automated Underreporter (AUR) program by minimizing revenue loss through increased document matching of individual taxpayer account information. The

additional resources will result in an increase in AUR closures from 2.05 million in FY 2007 to 2.64 million in FY 2010 and $208 million of additional enforcement revenue per year, once the new hires reach full potential in FY 2010.

Establish New Document Matching ? Kansas City +$23,453,000/+208 FTE This enforcement initiative will fund a new AUR site within the existing IRS space in Kansas City to address the misreporting of income by individual taxpayers. The establishment of this new AUR site will result in over $183 million in additional enforcement revenue per year, once the new hires reach full potential in FY 2010.

Increase Individual Filing Compliance +$6,544,000/+61 FTE This enforcement initiative will help address voluntary compliance. The Automated Substitute for Return Refund Hold Program minimizes revenue loss by holding the current-year refunds of taxpayers who are delinquent in filing individual income tax returns and are expected to owe additional taxes. This initiative will result in securing more than 90,000 delinquent returns in FY 2008 and produce $82 million of additional enforcement revenue per year, once the new hires reach full potential in FY 2010.

I n c r e a s e Ta x - E x e m p t E n t i t y C o m p l i a n c e +$15,000,000/+109 FTE This enforcement initiative will deter abuse within tax-exempt and governmental entities (TEGE) and misuse of such entities by third parties for tax avoidance or other unintended purposes. The funding will aid in increasing the number of TEGE compliance contacts by 1,700 (6 percent) and employee plan/exempt organization determinations closures by over 9,000 (8 percent) by FY 2010.

I n c r e a s e C r i m i n a l Ta x I n v e s t i g a t i o n s +$10,000,000/+37 FTE This enforcement initiative will help the IRS aggressively attack abusive tax schemes, corporate fraud, non-filers, employment tax fraud, and other tax and financial crimes identified through Bank Secrecy Act related examinations and case development efforts, which includes an emphasis on the fraud referral program. The IRS' robust pursuit of tax violators and the resulting publicity, foster deterrence and enhance voluntary compliance.

Department of the Treasury ? Budget in Brief FY 2008

Appropriated Accounts Internal Revenue Service

61

62

Research Effect of Service on Taxpayer Compliance +$5,000,000/+8 FTE This taxpayer service initiative will provide additional resources to enhance understanding of the role of taxpayer service on compliance by undertaking new research on the needs of taxpayers. The research will focus on four areas:

? Meeting taxpayer needs by providing the right channel of communication;

? Better understanding of taxpayer burden;

? Understanding taxpayer needs through the errors they make; and

? Researching the impact of service on overall levels of voluntary compliance.

E x p a n d Vo l u n t e e r In c o m e Ta x A s s i s t a n c e +$5,000,000/+46 FTE This taxpayer service initiative will help expand the IRS' volunteer return preparation, outreach and education, and asset building services to low-income, elderly, Limited English Proficient, and disabled taxpayers.

Implement Taxpayer Assistance Blueprint (TAB) +$10,000,000/0 FTE The IRS conducted a comprehensive review of its current portfolio of services to individual taxpayers to determine which services should be provided and improved. Based on the findings of the TAB study, the funding for this initiative will implement the following telephone service and Web site interaction enhancements:

? Contact Analytics ? a tool for evaluating contact center recordings for the purpose of identifying improvements.

? Estimated Wait Time ? this enhancement will inform taxpayers about their expected wait time in queue.

? Expanded Portfolio of Tax Law Decision Support Tools ? this will enable users to conduct key word and natural language queries to get answers to tax law questions through the Frequently Asked Questions database accessed on .

? Spanish "Where's My Refund?" ? this feature adds the refund status to the Spanish web page on IRS. gov, enabling the Spanish-speaking community to receive the same level of customer service on the web as available to the English web page.

Continued technological advancements offer significant opportunities such as the initiative for the IRS to improve the efficiency and effectiveness of call center services. Website enhancements are designed to maximize the value of , making the website taxpayers' first choice for obtaining the information and services required to comply with their tax obligations.

Explanation of Budget Activities

Taxpayer Services (TS) The FY 2008 President's Budget request is $2,103,089,000 in direct appropriation, $27,414,000 from reimbursable programs, and $108,000,000 from user fees, for a total operating level of $2,238,503,000. The direct appropriation level is an increase of 2.7 percent from the FY 2007 CR-rate. This appropriation funds the following budget activities.

Pre-Filing Taxpayer Assistance and Education ($578,078,000 in direct appropriation, $1,059,000 from reimbursable programs, and $76,000,000 from user fees) This budget activity provides funds for services to assist with tax return filing, including interpretation of the tax laws, media, and publications. In addition, funding for these programs continues to emphasize taxpayer education, outreach, increased volunteer support time and locations, and enhancing pre-filing taxpayer support through electronic media.

Filing and Account Services ($1,525,011,000 in direct appropriation, $26,355,000 from reimbursable programs, and $32,000,000 from user fees) This budget activity funds programs that provide filing and account services to taxpayers, process paper and electronically submitted tax returns, issue refunds, and maintain taxpayer accounts. The IRS continues to make progress in decreasing paper returns and increasing the use of electronic filing and payment methods. The IRS is also increasing both the capacity and effectiveness of its telephone and in-person taxpayer support.

Enforcement (ENF) The FY 2008 President's Budget request is $4,925,498,000 in direct appropriation and $49,353,000 from reimbursable programs, for a total operating level of $4,974,851,000. The direct appropriation level is an increase of 5.7 percent from

Department of the Treasury ? Budget in Brief FY 2008

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